Pamphlet No. 16 
Series of 1922-23 



The French Occupation 

4 

of the Ruhr 


ITS IMPORT AND CONSEQUENCES 
FROM THE AMERICAN VIEWPOINT 


j Discussed by 

Pierrepont B. Noyes 

11 

and 

Paul Fuller, Jr. 

With Remark^ by 

BEATRICE FORBES - ROBERTSON HALE 
OTTO H. KAHN - WALTER LIPPMANN 
WILLIAM HOWARD GARDINER 
WILLIAM M. CHADBOURNE 
PAUL M. WARBURG 
AND OTHERS 



A REPORT OF THE 53RD LUNCHEON MEETING 

HOTEL ASTOR 


of the 


Foreign Policy Association 

THREE WEST 29TH STREET, NEW YORK 

JANUARY 20, 1923 


n €_vv v 





The French Occupation 
of the Ruhr 


MR. JAMES G. MCDONALD, Chairman 


MR. PIERREPONT B. NOYES was formerly the American 
member of the Inter-Allied Commission of the Rhineland, and Presi¬ 
dent of the Inter-Allied Coal Commission. He is now president of 
Oneida Community, Ltd., of Oneida, N. Y. 


MR. NOYES 

I NEED HARDLY dwell on the fact that the world is passing 
through a crisis almost equal in its dangerous possibilities to 
the crisis of July, 1914. Certainly more people realize that 
it is a crisis now than then. Europe, however, is far away and al¬ 
though the average American knows more details of the Euro¬ 
pean problem than before the war, the actual invasion of the 
Ruhr Valley by French troops has created a new appetite for 
information regarding conditions and motives, and the probable 
results of this act of war. 

I have no authority to speak for anybody but myself. My 
only excuse for being here this afternoon is that I was in the 
Rhineland during a critical period. After the Peace Commission 
went home, the intrigues and the discussions and much of that 
which has determined the events since, centered around the 
Rhineland and this commission of which I was a member. 

In the time at my disposal, I shall confine myself as far as 
possible to those phases of the Franco-German relations which 
my experience in the Rhineland occupation brought forcibly to 
my attention, and which I have not seen generally discussed in 
the United States. The conviction which I then formed, how¬ 
ever, that the settlement of European problems could never be 
effected without the cooperation of the United States, has been 
so intensified as the years have passed, that I shall take advan¬ 
tage of this opportunity, as I have of others, to insist on the 
necessity of some kind of American intervention. 

First, I shall have to repeat what you will probably know, 
because I must try to paint a picture of the background—a back¬ 
ground which some will agree with, and some will not, because 
these are all matters which have to be interpreted by individual 
temperament—before I take up the present situation. 

2 





The story has often been told of the right-about-face which 
took place in France after the United States withdrew from 
European affairs, six or eight months after the armistice. The 
mass of the people in France were ready for a new internation¬ 
alism. There was, of course, intense desire for revenge and 
for reparations, but the cynical nationalists who still believed 
there was no power in the world but military power had little 
following. This lasted only so long as the United States ap¬ 
peared willing to play a big part in the settlement. There was 
a touching faith amongst the common people that America would 
use its immense power to force American traditions and ideals 
upon the discredited political system of Europe. 

When we deserted, there was an absolute panic on the con¬ 
tinent to get back to military solutions and to make up for the 
time lost coquetting with American liberalism. Those leaders 
who had all along insisted that France’s only safety lay in the 
ruin of Germany—that “the only good Germany was a dead 
Germany,” came immediately to the front. From that day on 
their power has grown and their plans have become the plans 
of France. Two years ago I predicted that if any French pre¬ 
mier made one step towards liberalism M. Poincare would be¬ 
come Premier, because he, above all others, stood for military 
measures and he knew how to line up the people of France be¬ 
hind his policy. I predicted that the French army would invade 
the Ruhr, because that was so evidently the strategic starting 
point for a military expedition against Germany and Europe. 
I did not predict these things as mere incidents, but as inevitable 
steps in the progress of a nationalist campaign which aimed 
at military domination, and which even then had glimpsed the 
possibility of a Napoleonic career in Europe. 

As I say, I watched the effect of the desertion of the United 
States, and determined in my own mind that M. Poincare was 
the center of the extreme militarist movement. At the center 
is always some one who knows what he thinks, someone who 
is obstinate enough to stick to what he thinks through thick 
and thin until the time for action comes. In such a time he is 
the one who comes out and assumes the leadership, and I believe 
M. Poincare has-never wavered from his theory, which was 
this: That the only safe Germany is a dead Germany; that 
sixty million Germans cannot be made safe unless Germany 
is ruined economically and politically. 

“Tt 1 appearTTs a harsh cntiroFTrench policy, I am bound to 
say that I feel more critical and more condemnatory of the policy 
of the United States. Frankly, I regard the policy of the present 
Washington administration, or rather its helpless lack of policy, 
as the outstanding cause of the world’s present predicament. 
(Applause.) The paralysis of leadership in the United States 
under the malign influence of domestic politics, seems likely to 
stand out in history as being chiefly responsible for the impending 

3 





economic collapse of Europe and for bringing upon the world 
the misery of further wars. America’s sins of omission are more 
to be condemned than France’s sins of commission. 

Originally, the plans of the French nationalists were largely 
dictated by fear. To M. Poincare and men of his belief there 
seemed no way of permanently protecting France from 60,000,- 
000 Germans except to ruin Germany economically and politi¬ 
cally. In the end, ambition came in as the ally of fear. It was 
impossible for Frenchmen to contemplate the new military 
position of France without recognizing the possibility and logic 
of a French dictatorship over the continent of Europe. I will 
waste no time discussing this aspect of the situation. It is fairly 
well understood in this country. I do wish, however, to clear 
up one misunderstanding. 

It is evident that the mass of the people of France are behind 
the Poincare policy of military aggression. It has been assumed 
that both were actuated by the same motives and that the 
peasants were back of the larger ambitions of the Prime Min¬ 
ister. I feel sure that this is not the case. 

After the war the peasants were assured that taxes would not 
be raised, since Germany would be obliged to pay. They have 
never forgotten this, and as the taxes have mounted, while Ger¬ 
many failed to pay, their anger has increased. They have laid 
everything to the politicians. When I left Europe the French 
people were saying, “If the politicians would stop meddling and 
let Foch do it, we would get the money.” It was this belief 
which broke two Ministers. It was this belief which M. Poincare 
encouraged through all the days of his struggle for power. The 
French peasant still has a feeling that if Foch goes into Germany 
with an army, he will come back with several billion dollars in 
in his pocket. M. Poincare has capitalized for quite different 
purposes this intense desire of the French peasant for relief from 
taxation. 

I have always believed that the French nationalist leaders 
valued the Reparation clauses of the Treaty more as probable 
grounds for military aggression than for the money they were 
likely to bring. These men saw early in the game that little 
real money could come out of Germany during the next few 
years. They always saw to it that the demands on Germany 
were larger than Germany could pay. It is very important when 
considering the possibilities of the future to remember that the 
French peasant is very mildly interested in the ambitions and 
military plans of M. Poincare. That peasant wants money. He 
will be satisfied when he gets money. He is supporting the 
present administration because it is following a course he has 
beed led to believe will get money. The administration, on the 
other hand, must know that France will be lucky if she gets 
enough money to pay for the expedition. 

Coming down to the Ruhr, it is a matter of general interest 

4 


1/ 


to know and understand exactly what the Ruhr means, both in 
the future and today. I had exceptional advantages for knowing 
the facts in this case, because I was President of the Coal Com¬ 
mission for a year, distributing coal to the industries of the 
Rhineland. And I even went into the mines and made an investi¬ 
gation of the conditions there, and even helped to settle some 
strikes in the German mines. And I was not trying to prove 
any preconceived opinions. I was trying to be absolutely 
impartial—to be able as a business man when I came home to 
figure out what the different people were after, and what it all 
meant. 

Since the events of last week, everyone is asking: “What 
does this invasion of the Ruhr mean? What is it for?” And 
“what are likely to be the results of the French campaign?” 
The pretext, of course, is to collect reparations. It is also evident 
that if France can actually control the Ruhr mines, with 120,- 
000,000 tons of the very best coal and the only coke available 
for French iron industries, it will be a great economic gain for 
that country. 

Going beneath the surface, it is a commonplace to say that the 
object of the French government is to disorganize Germany. 
There are, I believe, two other objects of at least equal import¬ 
ance in the minds of M. Poincare and his advisors. 

The first of these is political. The Horten , R ebellion iq 1919 
was a deliberate attempt of the French generals and politicians 
to separate the Rhineland from Germany. It failed when the 
people of the Rhineland refused to follow Dr. Dorten. French 
politicians in the Rhineland then saw their mistake. It was said 
quite openly that, if to the Rhine Provinces the Ruhr and West¬ 
phalia had been added, a very powerful economic unit would 
have been formed, and that the Rhinelander is too practical to 
have refused an opportunity to set up as a separate nation under 
such advantageous circumstances. From that day, the invasion 
of the Ruhr has meant for the French another attempt to sep¬ 
arate the Rhineland from Germany—an attempt promising 
much better chances of success than before, and one which would 
strike the economic prosperity of Germany a deadly blow for 
all time. That attempt will, I believe, soon be made. 

The other leading incentive for invading the Ruhr was of a 
military character. I will not take any time here to prove my 
point in detail, except to say that a French writer, answering 
an article which I wrote for the New York “World,” in which 
I fully stated this military point, said that I was right. The 
Rhineland cannot support a large army. The industrial districts 
of Westphalia and the Ruhr can theoretically be made to sup¬ 
port at least 250,000 French soldiers. The French militarists 
aiming to dominate Europe, envisage 250,000 soldiers,, mostly 
Africans, permanently garrisoning the Ruhr and the Rhineland, 
without expense to France. Most of that army must ultimately 



be black because the birth-rate and other considerations in France 
make such an army impossible without the use of colored troops. 
With an army of 250,000 men, equipped and ready to move, 
located just at that point France could during the next twenty-five 
years, intimidate any nation of the continent which opposed the 
French militaristic plans. With Belgium and Poland on either 
side, this army would be the keystone to a military arch capable 
of being extended through the Balkans and on into Russia as 
occasion offered. Furthermore, looking backward at what has 
happened in the past, France has seen that any country that 
starts out on a militaristic career has to look out for the radicals 
at home—and a Frenchman won’t shoot a Frenchman. But 
from that army of two hundred and fifty thousand, a hundred 
thousand colored troops could be put into Paris in twenty-four 
hours. 

If, then, the plans of France do not go awry, I believe, first, 
that you can expect to see at an early date the people of the 
Rhineland and the Ruhr offered an independent nationality under 
French protection, as an alternative to increasing German chaos, 
and second, that you will see an army of at least 250,000 French 
soldiers in the Rhineland and the Ruhr. 

Beyond that, the realization of French ambitions is “on the 
knees of the Gods.” The French, themselves, cannot have vis¬ 
ualized all the steps in the realization of their dream. 

It is, however, a matter of intense interest to the rest of us to 
anticipate the results of this adventure. One man’s guess may 
be as good as another’s. The destruction of credit and hope in 
Germany, the notice to the financiers of the world that there is 
no security for loans to that country, must soon paralyze domes¬ 
tic enterprise. 

An imaginative person might visualize a sequence of events 
about as follows: Ruhr strikes; more troops; more strikes; less 
coal; deepening industrial depression throughout Germany, and 
increased unemployment. In time this would almost certainly 
result in desperate disorders, probably beginning in the East. 
One can then imagine Poland joining in the melee, either on her 
own initiative or prompted by France. Russia might attack 
Poland, and Turkey—seizing the opportunity—join her fortunes 
to Russia. If this should transpire, the Balkan States, already 
seething with jealousy and intrigue, would surely blaze into war. 
In all this confusion, France with her military predominance, 
both at home and in Poland, would hope to overawe some of the 
Balkans and conquer the rest. Then with Russia surrounded, 
she could open up that country on her own terms. 

Details can only be guessed, but the general outcome can 
hardly be doubted. Such a war would surely be protracted and 
probably inconclusive on account of the exhaustion of all the 
countries of Europe. It would end in a peace of armed enemies. 
The world would enter on a period such as it has often seen 

6 


before, where alliances and combinations were building and 
nations were nursing their economic strength for an approaching 
war. 

Germany, still between the pinchers of a French Rhineland 
and a brench Poland, could hardly fight effectively; but sullen, 
struggling, suffering, desperate, she certainly would, as she could, 
be organizing Russia and the East, those immense reservoirs of 
men, for the day of great revenge. 

If France is allowed to continue her military adventure, you 
can anticipate the next ten years of history as well as I. Neither 
of us can predict the details. We do know that it means misery 
and poverty in Europe, and trouble for America which no man 
can forsee. 

As my French confrere used to say, “It’s a mess.” Everyone 
is asking, “what can we do?” The fact is that the day for easy 
solutions is past. Any proposal will be found open to objections. 
With our government convinced we can do nothing, and all our 
statesmen puzzled, it is perhaps presumptuous for an ordinary 
citizen to propose a definite course of action. And yet, it is the 
ordinary citizen who must suffer the penalty of inaction. And it 
is the sons of ordinary citizens who will probably have to fight 
as a result. Therefore, presumptuous or not, I am going to 
submit to you a proposal for positive action by the United States. 
In fact, I would not have taken your time to paint this gloomy 
picture, which is already familiar to most of you, had I not a 
remedy to suggest. 

I would first recognize by word and deed that there is a crisis 
and that a crisis automatically introduces a new element in our 
discussions. We are bound to get down to realities as men do in 
dangerous crises. 

I would recognize that amongst the large nations of the world 
there are left only two financially and morally strong enough to 
give effective help in this emergency; only two which have con¬ 
sistently opposed the military solution of the European tangle. 

Great Britain and the United States are isolated together, if I 
may say so—isolated and unique in their strength; isolated in 
their common insistence that the lessons of the last war be 
heeded; isolated, too, I believe, in the fundamental willingness 
of their people to make sacrifices if the need is shown to be 
sufficient. 

General solutions cannot at the moment be attained. Why, 
then, should we not confer with Great Britain in our most prac¬ 
tical mood, as to steps the two countries can take to halt the 
present disastrous march of events in Europe before it is too late. 

Concretely, I propose that the United States appoint a com¬ 
mittee of our ablest men to confer with Great Britain as to 
possible joint action in the emergency. The mere appointment 
of this committee would accomplish three things: 

7 



ist—It would be notice to the world that for the purpose of helping 
solve present problems, the United States had temporarily abandoned 
its isolation. 

2nd—It would warn France to go no further until the two countries 
had a chance to make new proposals. 

3rd—I believe it would give pause to French statesmen who have for 
three years dreaded an entente between the English speaking nations—a 
moral entente which might determine political ascendency for a generation, 
even though it never ripened into a formal political alliance. 

An eminent American statesman, to whom I proposed this 
plan, asked—“And what then? What would your committee 
propose? So far you have only made a ‘gesture.’ A gesture 
must be followed by action. What should Great Britain and the 
United States say to Europe?” 

From the standpoint of statesmanship and politics, this may 
be a difficult question. From the standpoint of a business man, 
it seems simple. 

The complexity of the present situation arises from the web 
of past actions and ideas in which we are enmeshed. If the mis¬ 
takes of the past are a permanent legacy, if we must confine our¬ 
selves to devising ingenious amendments to the futilities created 
by the wartime psychology of the world, I agree there is no 
solution in which the United States can afford to participate. 
We must sit idly by until disaster discredits the past. 

But this is not the way we approach serious problems in busi¬ 
ness. In proportion to the seriousness of the crisis, we brush 
aside the past and look squarely at conditions surrounding the 
present, which is exactly what I would have these two strong, 
practical nations do today. 

And first I would take a brief inventory. The European tangle 
is now beyond the power of the League of Nations to straighten 
out, at least without the powerful aid of the United States, and 
the United States cannot, as a matter of practical politics, be 
induced to join the League now. 

Germany cannot pay further reparations now. She is down 
and out. Her ability to pay, which since the war has been a 
diminishing quantity, is now at the lowest point. It is practically 
nil. The attempt to force reparations by the aid of troops is 
removing the last chance that Germany will be able to pay for 
many years to come. 

France was devastated. France should have reparation if it 
can be obtained. But granting her need of financial assistance, 
the attempt to force it from a country which cannot pay, is ruin¬ 
ing the world. There is the crux of our crisis. Reparations, 
sanctions, treaties, all belong to a discredited past. The threat 
of ruin and more war is the reality of the present. 

When we inventory, we re-value, and today we do well to ex¬ 
amine old values, not only in the light of impending disaster to 
Europe, but with an eye to our own safety and prosperity. 

For centuries it has been an axiom in militaristic Europe that 
a defeated enemy must pay an indemnity. Perhaps this is right, 

8 


perhaps it is not. It all depends on the balance of the benefit to 
the peoples of the world. In 1919, with our minds inflamed by 
war, we accepted the formula, but I see no reason to stick to it 
now if it stands in the way of world salvation. We said also, 
four years ago, that France must make sure of protection from 
Germany in future. Today, France, as well as the rest of the 
world, can profitably postpone that question in favor of the over¬ 
shadowing question, whether there will be any France or Ger¬ 
many worth protecting. 

This, then, is what I would have Great Britain and the United 
States say jointly to Europe: “We sympathize with France, as 
we did in 1918. We reprobate the actions of Germany, but the 
past four years have proved that we were wrong in our plans to 
give effect to that sympathy and that reprobation. We are done 
with those plans. The persistency of France in backing up with 
military agression the most extreme interpretations of our allied 
post-war hallucinations is not only threatening civilization but, 
to be perfectly frank, it is threatening the peace and prosperity 
of our own people. For ourselves, therefore, we shall forget 
reparations and sanctions until such time as a return to normal 
conditions permits a brand new consideration of the demands of 
justice. We, Great Britain and the United States, hereby de¬ 
nounce the reparation provisions of the Versailles treaty. We 
advise France to withdraw her troops from the Ruhr and the 
Rhineland, as well.* We advise France to reduce her military 
forces to a point which will end the possibility of military solu¬ 
tions. We advise other nations which have maintained armies 
to match those of France to reduce theirs. We advise that for 
the time being the past be buried as a past, and that the prob¬ 
lems of economic revival and balanced budgets absorb the at¬ 
tention of all nations. 

If this is done, we believe, since Great Britain and the United 
States must play a very important part in the economic revival of 
Europe, and especially of Germany, that when political obstacles 
to that revival have been removed, their influence will obtain 
more real money reparations from Germany than France will 
ever extort with her troops. In the end, it goes without saying, 
that these two rich countries, with everything to gain by the re¬ 
establishment of peace and prosperity in Europe, will be bound 
to play a helpful and benevolent part in the economic reconstruc¬ 
tion of Europe—and especially of France. Self-interest if not 
American fair-mindedness, will tell us we cannot honestly profit 
by France’s relinquishment of reparations justly due her and then 

* Mr. Noyes, in speaking later on this same subject, for the F. P. A., 
here added this explanatory phrase: “But the United States cannot hon¬ 
orably take this course without promising France that in case her advice 
is accepted, this country will join the League of Nations and use its power¬ 
ful influence to obtain from Germany all the reparations which it is possible 
to pay without preventing her own economic recovery.” 

9 



insist she pay us all the millions we loaned her to fight a war we 
had adopted as our own. Also British and American sense of 
justice will demand that Germany suffer and pay to the fullest 
extent consistent with her own economic recovery, which is ad¬ 
mittedly necessary for the recovery of Europe. But for the 
moment, our one task is to remove the blight of militarism with 
a strong hand. 

o # 

This plan may sound one-sided and arbitrary, but as in a 
theater panic, someone has to be arbitrary. Our theater is on 
fire and France is jamming the door shut. We would like to be 
polite and friendly. We would grant her the first chance of exit, 
but in the interest of the women and children behind, who must 
otherwise burn, we demand that she let that door be opened. If 
in her panic France refuses, it becomes the duty of some man 
nearby to forcibly remove her and open the door to safety. 
Brutality at such a time is not a sign of unfriendliness. Nor does 
it imply undue tenderness toward Germany. Until the fire is out, 
we cannot consider punishment of the culprit who started it. 

If France refuses to take the advice of her former allies, then 
I say, by all means, use force. We have the means and these 
means are neither military nor political. Economic pressure 
would quickly force the issue. Great Britain and the United 
States could easily, acting jointly, affect French credit and the 
value of the franc so seriously, as to render the continuance of 
expensive military adventures impossible. 

France in defiance of public opinion in England and America 
said—“We have the military power to force Germany and break 
her, if we will, and that without the assistance or approval of 
other nations—and we will.” Great Britain and the United 
States have the economic power to force France. In the interest 
of civilization, they should do it. 

I firmy believe that this is a practical proposal and if put into 
effect, cannot fail to produce results, without the expenditure of 
money, the use of soldiers, or any of these entangling obliga¬ 
tions the American public has so much dreaded. It may seem 
revolutionary, but it'is only seriously revolutionary for those 
French imperialists who have appropriated the reparation section 
of the Versailles Treaty as a charter for their aggressive military 
schemes. As for the French peasants who expected German gold 
to pay their excess taxes, it will be an awakening to realities. In 
the end it will insure their benefit financially. For the rest of the 
world, which has seen this reparation section bar the way of 
peace and reconstruction during four long years, no one will 
really be sorry to have the cards shuffled and a new deal. 

In conclusion, I ask everyone to look at that proposition just 
a minute from a totally different angle than they have heretofore 
viewed it, in a way different from all their old ideas; as if there 
were no question of referring back to something we have said 
or done in the past. And I ask you whether looking at it from 

10 



this angle our forcible intervention would not be better for 
France and for everybody else in the end. (Prolonged ap¬ 
plause. ) 


MR. PAUL FULLER, JR., is a member of the law firm of 
Coudert Brothers, acting as legal adviser during the war to the 
French Government. He was also the Director of War Trade In¬ 
telligence, 1917-18, and Acting Director of the Bureau of Enemy 
Trade, 1918-19. 


M R. FULLE R 

M R. NOYES APOLOGIZED—I think the apology was 
unnecessary—at not being a speaker. I had intended to 
make the same apology. And I can understand and appreciate 
the remark which was made to me by an old colleague in Wash¬ 
ington as I came in to luncheon this afternoon. He said, “I 
see that this Association has now degenerated into a discussion 
between two very humble members of the War Trade Board.” 
(Laughter.) I am much more humble than Mr. Noyes, however, 
in that I do not claim to be a prophet, nor do I claim to have the 
ability or the knowledge of the facts to discuss in detail the 
economic and financial results of the Ruhr occupation, which, 
I take it, is a fact today, and we must look at it as such. 

In being introduced, reference was made to the fact that I 
had had the honour, the great honour in the past of representing 
the French Government in a legal capacity. I wish it very clearly 
understood, however, that it is in no such capacity that I have 
accepted the invitation today. When Miss Merriman invited 
me she said that she would like to have an American point of 
view as to France’s justification for the step which she has, I 
believe, been forced to take. And, it is purely as expressing an 
American point of view that I am here today. I say an Ameri¬ 
can point of view, because I don’t believe, unfortunately, that 
there is the American point of view. Nobody knows what it is. 
In the last few days, I have had, I have made the opportunities 
to discuss the question of the Ruhr occupation with a great many 
Americans, colleagues at the bar, bankers, business men, and 
others, and I find the greatest divergence of views. 

One, an eminent and successful member of the bar, takes a 
very extreme view, and I believe it would be interesting to quote 
him. He had explained to me his understanding of the economic 
system in Germany, and he said, “Since the armistice, the Ger¬ 
man industries have been going at full blast, and owing to the 
depreciation of the mark, and labor conditions in Germany, 
the great industrial leaders have been able to amass enormous 
wealth in the shape of foreign credits.” He went on to say, 
“If I were in authority in France on the Ruhr, I would without 

11 



further delay arrest Mr. Stinnes^, who is the greatest culprit. 
He has not only plotted against France, and against Europe, 
but against the German people as well. I would have him court- 
martialed for refusal to obey orders, and shot in the biggest 
public square of Essen. And I would then serve notice on the 
other heads of the great industries and cartels, that unless they 
showed signs of real cooperation immediately, they would follow 
in his footsteps.” 

Now, I think that is a very extreme view, one with which I 
do not sympathize at all. But, no less extreme than the view 
of the New Republic, which said in an article shortly prior to 
the Ruhr invasion that, if France took the Rhineland, they would 
be guilty of as great an intrinsic wrong as the German army 
when it went into Belgium. I take it that both of these views 
are inspired by passion and by prejudice. And that if we really 
want to get anywhere, we Americans, in private or official life, 
should try to look at the question dispassionately, and to see 
what the legal side, as well as the moral side of France’s case is. 

From the earliest times, in both the civil and common law, the 
courts have sanctioned and assisted a judgment creditor in col¬ 
lecting his debt, and, if need be, in seizing the property of the 
debtor. If it were not for this doctrine, it would merely en¬ 
courage dishonesty and lack of business ethics, and it would work 
a penalty on men who wanted to live up to their contracts. This 
doctrine of “distress,” as it is called in the legal “lingo,” has been 
recognized in international law as well; and the gentlemen who 
drafted the peace treaty, and well knew of Germany’s views with 
regard to the sanctity of treaties when not backed by force, were 
particularly careful to include provisions which would allow 
France, in case of voluntary defaults, to take the necessary physi¬ 
cal steps in order to see that she was paid. So much for the 
purely legal point of view. I think that there is very little doubt 
as to that. It is true that Germany has protested, but not one of 
the countries to whom the protest has been sent, has paid the 
slightest attention to it, and, as one of the newspapers said this 
morning, they have all been put in the dusty pigeon-holes of their 
Foreign Offices. 

However, I think the moral side of France’s case is very 
much more important, and while I do not believe in continually 
harping on the acts of brutality that Germany committed during 
the War—the peace treaty is signed, and we Americans have 
tried to forget it—it is quite impossible to understand the 
psychology and feeling of the French people (leaving their gov¬ 
ernment entirely aside), unless we do mention and bear in mind 
some of these facts. 

It is very easy, or comparatively easy, for the United States 
and Great Britain, with the physical guarantees against aggres¬ 
sion and invasion, to forgive and forget. France may forgive, 
but she cannot forget. The years of terrible suspense from 

12 


1871 to 1914, and of mental and physical anguish from 1914 to 
1919 make, in my opinion, forgetfulness not only impossible, but 
wrong. The French people should not forget. I have returned 
recently from a visit to France, the second in two years, and I 
was astonished to see how little bitterness the French people 
show against Germany. There was no spirit of revenge what¬ 
soever. But, on every side, there was grim reminders of broken 
treaties, and of the argument of might. 

I had the pleasure of spending a short time at the chateau of 
the Prince of Monaco, which is in the devastated area. During 
the war, it was owned by the present Prince’s father, who was 
known to many of you as a great explorer and scientist, who 
visited New York only a few years ago. He was, please re¬ 
member, a sovereign prince, and a neutral, and, prior to 1914, 
a close personal friend of the Kaiser. When he returned to his 
chateau after the armistice, there was nothing left but the bare 
walls. What had been a modest, but very beautiful museum was 
completely gutted; pictures, tapestries, furniture, all gone. I 
remember an old column, a carved column, which was between 
the doorway of two of the principal rooms, had been taken out of 
its place. These various articles were found, fortunately for the 
present Prince, after the armistice, mostly in Belgium, carefully 
packed and addressed to Prince Von So-and-So, Berlin; or Gen¬ 
eral Von So-and-So, at Bavaria, in accordance with the distinc¬ 
tion of the addressee and the value of the loot. 

Now, these things, perhaps, shouldn’t be harped on, as I said 
before. But we should recognize the fact that the French 
people have had that constantly before them, and in the case I 
mention, it was pure burglary. There was no question about 
enemy property at all. They knew it wasn’t enemy property. 
They simply stole it. Well, unless we have that in mind, it is 
very hard for us to understand the psychology of the French 
people. 

In addition to that, the French people know, as every disin¬ 
terested American traveler has recognized in the last two years, 
that there is in Germany a deep, bitter spirit of revenge, and 
that they are looking forward toward a new “Tag,” a new day, 
when, as the boast has been made, there will not be one dry eye 
in the whole of France. 

Now, these are disagreeable facts to dwell on, but, in my 
opinion, they must be considered in the light of the present situ¬ 
ation. 

I should now like very briefly to give an outline of the history 
of reparations, without going into too many statistics. It is a 
history of German defaults and of French concessions. 

By the terms of the Peace Treaty, Germany obligated herself 
to pay before May, 1921, and pending the fixation of a definite 
amount, some twenty billions of gold marks. Out of this amount, 
five billions was paid. A first default of fifteen out of twenty 
billions. 13 


On January, 1921, at the Paris Conference, the total of Ger¬ 
many’s reparations was fixed at 226 billion gold marks. I am 
frank to say, and almost every honest-minded Frenchman agrees, 
that this was out of proportion to Germany’s ability to pay. 
That sum was very shortly thereafter reduced voluntarily by the 
Allies to 132 billion marks, which was France’s second conces¬ 
sion. 

By a decision of the Reparations Commission of May, 1921, 
Germany was held responsible and was obliged to pay during 
the years 1921 and 1922 an annual sum of two billion gold 
marks, plus a sum equal to 26 per cent of her exports, which 
latter sum had been estimated very conservatively at two billion 
gold marks a year. That makes eight billion gold marks for the 
two years. Out of these eight billion, Germany paid two billion, 
which was another default on the part of Germany, and then 
there followed further concessions on the part of the hard¬ 
hearted allies. 

As early as June, 1920, Germany was found by the Repara¬ 
tion Commission to be in default in her deliveries of coal. No 
drastic steps were taken, but on the contrary, some 400 million 
gold marks were advanced by the allies, out of which France’s 
share was 239 million gold marks. 

Germany’s latest default—I hope it’s going to be the last 
one—was in her deliveries of coal and of wood for 1922. Un¬ 
der the terms of the Peace Treaty, Germany had agreed to 
deliver—and that is sometimes forgotten that Germany is a 
party to the Peace Treaty and put her signature to it, and agreed 
to do certain things—Germany had agreed to deliver some 
19F2 million tons of coal for the year 1922. This was reduced 
by the Reparation Commission to 13,800,000 tons. Still an¬ 
other concession on the part of France, and her allies. Now, 
this amount of 13 million tons, in round numbers, amounted 
to less than 5 per cent of Germany’s total output for 1922. The 
exact amount of the output is not known, but it is estimated by 
everybody to be in excess of 300 million tons. And even in this 
small amount of 5 per cent of the total output, Germany neg¬ 
lected and failed to live up to her obligation, and it has been held 
by the Reparation Commission that she has failed to make 
delivery, and that she was 16 y 2 per cent, short in the deliveries 
of coal throughout the year. During the same period, Germany 
defaulted in deliveries of wood and telegraph poles to the extent 
of about 20,000 cubic meters of wood, out of 55,000 agreed 
upon, and 135,000 telegraph poles were short out of a total of 
200,000. 

Now, so much for the defaults. And, before discussing 
France’s greatest effort at conciliation and concession, I would 
like very briefly to state what France had been doing in the mean¬ 
time. 

At the end of November, 1922,—last November—France 

14 


had reconstructed two-thirds of all of the devastated regions. 
(Applause.) To the mere layman, like myself, who has seen 
even a small part of the destruction wrought by four years of 
war, this is almost inconceivable. It was a titanic task. And 
the cost of it, including certain other advances made against 
Germany’s debt, amounted to over 108 billion francs in a period 
of three years, every franc of which came from the labor and 
the savings of the French people. (Applause.) Now, of this 
enormous total, 78 billion francs, or 28 billion gold marks, was 
devoted exclusively to physical reparations, exclusive of pensions. 
That is a point that I want to stress. I would like you to re¬ 
member that figure in the light of the Paris Conference, that 
28 billion gold marks, or their equivalent in francs, was devoted 
to the reparations, exclusive of pensions. Now, this was the 
situation at the time of the Paris Conference in the early days 
of this month, where France made her very greatest effort to 
avoid the seizure of the Ruhr. At this Conference, France sub¬ 
mitted a plan. I have received the French text of this plan 
through the French newspapers only the day before yesterday. 
It is very lengthy. The plan as stated was rather complex, but 
I have analyzed it carefully and conscientiously, and I think that 
my resume is undoubtedly correct. 

France proposed at this Conference to reduce the amount of 
German reparations, which was and is today fixed at 132 billion 
gold marks, to 50 billion gold marks. She consented to a mora¬ 
torium of two years, and easy terms of payment. Now, of this 
50 billion gold marks, France’s share would have been 26 billion 
gold marks, which is two billion marks less than she has already 
spent on physical reparations, and some 16 billion gold marks 
less than the estimated total cost to complete the reparations 
which she is now at work on. Now, this offer—that is, the re¬ 
duction to 50 billion gold marks—is, I think, within the most 
modest estimates of Germany’s ability to pay. And further¬ 
more, it further eliminated the question of the right of the allies 
to impose pensions on the German people. This point, one of 
the most criticized clauses of the Versailles Treaty, was elimin¬ 
ated by France’s answer, and she was willing to accept as her 
share less than the amount already expended, and some 16 
billion gold marks less than what she actually had to pay to 
build up the houses, clear the fields, and put the people back in 
their residences as they were before the war. 

It is true that, as a condition for this concession, France’s re¬ 
quest was first, a reduction in the European interallied indebt¬ 
edness. We were left out of it. No question was raised as to 
the payments which, so far, we have insisted on. And, in the 
light of the past four years, France insisted upon certain guar¬ 
antees that Germany would make a real effort to balance her 
budget, and would make a real effort to pay promptly, after the 
two years’ moratorium. Unfortunately, the breaking-up of the 

15 


Paris Conference made this, to my mind, very generous plan on 
the part of France impossible. And it was only after that effort, 
and after a finding by the Reparations Commission that Ger¬ 
many was voluntarily in default, a decision, by the way, which 
was concurred in by our unofficial observer, Mr. Boyden, though 
he did criticize the Treaty to which we are not parties, but he 
did specifically say that there was no question about a voluntary 
default on the part of Germany; and it was only then that France 
finally determined upon the occupation of the Ruhr valley. 

Fortunately, there is one point on which Mr. Noyes and I 
agree. And we are also in agreement with some of the best 
minds both in Europe and in America: That the responsibility 
for the critical, tragic—if you will—situation of today, can very 
properly be laid at the door of the United States. (Applause.) 
I am personally convinced that if we had merely taken an official 
part in the action of the Reparations Commission, that the 
amount of German reparations would a year or more ago have 
been reduced to an amount which Germany could have paid; 
and that with the United States by the side of her old allies, 
Germany would have paid. But, since our country has chosen 
otherwise, has decided to remain aloof and apart from European 
affairs, to take no responsibility other than this kind of talk that 
we are indulging in today, in the reconstruction of Europe, to 
play no part in the great problem, the greatest of all problems, 
the reparations,—I think personally, that in common courtesy 
to an old friend and ally, we might at least remain discreetly 
silent while she is making her great experiment. You have all 
noted that Great Britain, who has much more at stake in a 
prompt solution of the reparations question and in Germany’s 
come-back, has nevertheless, through her Prime Minister and 
through the Minister of Foreign Affairs, bid her old friend god¬ 
speed and good luck. I think that the least that we can do in 
view of the fact that we have kept out of all this, is to try hon¬ 
estly to understand the French point of view, to sympathize with 
the efforts that she has made during the past long, tedious four 
years, when they have unaided, been rebuilding the damages done 
by war,—the least we can do, I say, is to show a sympathetic 
interest if we can do nothing else. (Applause.) 

The Chairman: The Chair would be glad to receive ques¬ 
tions from the floor addressed either to Mr. Noyes or to Mr. 
Fuller. If nobody has any questions, I’d like to put a question 
myself to the speakers. I’ll ask you, Mr. Noyes and Mr. Fuller, 
if you will not speak briefly on the point of the legality of the 
French occupation of the Ruhr. 

Mr. Fuller : I have explained as fully as I can, without going 
into a lengthy legal argument and reference to the Treaty, which 
I have not with me, and I am not familiar enough with it to pick 
it out if you would hand it to me now,—I couldn’t say any- 

16 


thing more than I have already said in the few remarks that I 
have made on that point. So far as France is concerned, she 
must abide by the decision of the tribunal appointed to decide 
that question by the Treaty of Versailles, which was the Repara¬ 
tions Commission. The Reparations Commission has held that 
Germany was in deliberate and voluntary default, and from 
the purely legalistic point of view, I think that is a sufficient an¬ 
swer to your question, without going into the details. 

Voice: A clause of the Treaty provides that where there is 
a wilful default, the nations can go in and take economic, finan¬ 
cial and any other sanctions that they desire to take. 

Mr. Fuller: That’s the section I was referring to. 

Mr. Noyes: Mr. Fuller being a lawyer, is diffident about ex¬ 
pressing himself more fully on this very important phase of the 
situation; and I, being no lawyer, of course know all about it. 

In my duties while I was in the Rhineland, I had to study the 
Treaty a great deal, and I am going to bring up a point, that I 
haven’t seen mentioned anywhere. I believe the occupation is 
absolutely illegal. The French went in there, as they say, under 
paragraphs 17 and 18 of Part VIII, Annex II. 

In case of default by Germany in the performance of any 
obligation under this Part of the present Treaty, the Com¬ 
mission will forthwith give notice of such default to each of 
the interested Powers and may make such recommendations 
as to the action to be taken in consequence of such default as 
it may think necessary. 

The measure which the Allied and Associated Powers shall 
have the right to take, in case of voluntary default by Ger¬ 
many, and which Germany agrees not to regard as acts of 
war, may include economic and financial prohibitions and re¬ 
prisals and in general such other measures as the respective 
Governments may determine to be necessary in the circum¬ 
stances. 

Now, to me, and I can’t see any answer to it, that has to go 
with what else is said in the section. England has maintained 
from the beginning that military measures did not come under 
that provision. It must be interpreted. It doesn’t say anything 
about military force, and therefore it has to be interpreted. 
Section 13 of this same Annex defines questions which must be 
unanimous: “On the following unanimity is necessary. . . . 
(/) Questions of the interpretation of the provisions of this 
Part of the present Treaty 

Now, to me, the whole question hinges right there. As long 
as England said it didn’t come under that section, the decision 
had to be unanimous. You had to at least have the arbitration 
mentioned in Paragraph 13 before the invasion could be carried 
out. (Applause.) 

Mr. Fuller: Mr. Noyes quoted from Annex II, subdivision 

17 


(/) and it says that questions of interpretation must have the 
unanimous vote. But there was no question of interpretation 
here. Great Britain never raised any question of inter¬ 
pretation. It simply voted agaist a certain measure. She 
voted that there was not a voluntary default on the part of 
Germany. That is all. The other three voted that there was. 
There was never any question of interpretation raised before 
the Reparations Commission, and therefore it would be a ma¬ 
jority vote that would control, and not a unanimous one. 

Mr. Noyes: I have been compelled to rely entirely upon 
the newspapers for my information. The newspapers said that 
the British Government held that that paragraph could not be 
interpreted to warrant military aggression against Germany. 

Mr. Fuller: The newspapers, I believe, were incorrect, 
because I have seen the official reports as they arrived yesterday 
from France, and there the discussion was merely on the ques¬ 
tion, “Has there been a voluntary default?” Mr. Roland Boy- 
den, the American observer, in his memorandum did go further 
and criticized the basis of the whole thing, that is, the Treaty, 
but that was entirely off the record. And even he did not raise 
this question of interpretation. 

Mr. Walter Lippmann: I should like to ask Mr. Fuller 
his opinion, not of the legality or of the provocation, but of the 
wisdom of the French move. 

Mr. Fuller: My opinion, sir, is that it would be impossible 
for the French people to continue in their work, it would be 
unfair to ask them to continue to pay the taxes that they are 
paying today, the work of saving that they are doing, and to 
continue the work of reconstruction, unless every possible meas¬ 
ure, coercive or otherwise, was adopted in order to force Ger¬ 
many to pay what she agreed to pay. That is my answer. 

Mr. Theodore Marburg: Mr. Fuller himself conceded 
that the demands made by France upon Germany until the last 
demand, which was reduced to 50 billions, were in excess and 
could not have been paid. Under the circumstances, is it fair 
to hold up against Germany her previous defaults, when Mr. 
Fuller himself says that she could not have paid? 

Mr. Fuller: I don’t understand that the original terms 
have been insisted upon. Moreover, I am not an economist, 
and I am only expressing my opinion, my personal opinion in 
these matters. But under the latest French plan, at the end 
of the two-year moratorium, it would have been quite possible 
for Germany to meet her reparations payments, and in fact to 
pay more than she would be obligated under that plan. But 
certainly, leaving out the cash reparations, she certainly should 
not have been in default during the last year on the coal and 
wood deliveries. (Applause.) 

Mrs. Frederick Nathan: I would like to ask if it isn’t 

18 


true that after the Franco-Prussian War, Germany set the sum 
that France had to pay in reparations, and the soldiers remained 
in France until that sum was paid, without any arbitration and 
without any outside help or advice. (Applause.) 

The Chairman: Mr. Noyes says that is so. It is a matter 
of history. Do you want to go ahead and raise the further 
question as to the comparative situation in 1871 and now? 

Mrs. Nathan: Yes. 

The Chairman: Then, interpreting the speaker’s question, 
I ask Mr. Noyes this: Whether the German assessment against 
France in 1871, which France paid under military pressure with¬ 
in three or four years, is in any wise comparable in his judgment, 
all the circumstances considered, with the original assessment, 
or even the present suggested assessments against Germany? 

Mr. Noyes: I am put in a position which I knew I would 
be put in before I started: that of criticizing France, and de¬ 
fending Germany, and I am inclined to take refuge in my original 
statement. I am only interested in ourselves and the world in 
general. (Applause.) Let’s forget what has happened. I have 
only the welfare of the whole world in mind. (Applause.) 
That’s my point of view. With that statement, I can slide out 
a little, perhaps, because I believe that the original discussions 
and the original demands were so entirely out of range, that they 
have nothing to do with actualities, realities. And there is no 
comparison at all with what Germany assessed against France 
in 1871. 

I also agree with Mr. Fuller that Germany has never paid 
what she could, either in coal or in money. I believe that she 
has been from the beginning in this position. Supposing you 
told me that I must pay you $10,000 or go to jail. I’ve got 
$1,000 in the world. Do you suppose for a minute that I’m 
going to give up that $1,000, and then go to jail anyway? 
(Laughter and applause.) That’s just what happened. Fur¬ 
thermore, I want to say one word more while I am on my feet. 
I have frequently had it in mind, and I believe it’s the thing 
that led up to all this mess. It is often said Germany signed this 
treaty in good faith, and is now breaking it. Nothing of the 
kind. It was in no way different from a hold-up on the street, 
with a man pointing a gun at your head. (Applause.) On the 
26th or 28th of June, which was the final day on which Germany 
could have signed the treaty, 100,000 of our troops came out of 
billets, and were ready to march. I was on the bridgehead 
across the Rhine at the time, and I tell you it was a wonderful 
sight. I went all the way out to the limit of the bridgehead 
where I saw them all, ready, even anxious and eager to jump 
off on the following morning. All the paraphernalia was ready. 
The line of march was decided upon. The order of troops 
was decided upon. There were the bridge-builders and every- 

19 


thing at the head of them. And they waited that night, those 
armies, hoping that they were going to jump off. In the morning 
six or seven hundred thousand men would have jumped off for 
Berlin if they didn’t sign. Whatever the faults or the merits 
of the Treaty, nobody can say that the Germans signed it in 
good faith. They had a cannon at their head. 

I feel that I have said something so strong in saying that the 
present managers of France value the reparations section of the 
Treaty only as an instrument to invade Germany, and for the 
other purposes that I have outlined, that I must tell you a little 
story, because it is very pertinent and throws a sharp light on 
M. Poincare when he speaks of defaults in coal. 

I was called in by the Reparations Commission as one of the 
experts on the coal situation in the Ruhr, and I was asked to 
reconcile the two figures, the German and the French figures. 
France was starving for coal. Everyone knew that. I went 
through the figures very carefully, and gave a figure to our Rep¬ 
aration Commissioner as to the amount that Germany could 
send without shutting down her industries. The German head 
of the delegation told him the same day that he would make 
an agreement to deliver fifty thousand more tons a month than 
I had figured. Before we were allowed to discuss this question, 
M. Poincare insisted absolutely that we were not to discuss how 
much coal France could take, how much she could handle. Well, 
that’s what I was preparing to discuss, because I was only inter¬ 
ested in getting France coal, because it looked as though she 
were going to suffer terrifically for lack of coal, and that to me 
was a very important element to take into consideration. I said 
to Colonel Dumont, when we were all through, “Do you know 
how much coal France and Belgium could take physically on 
their railroads and canals?” “No,” he answered, “I don’t 
know.” “Well,” I said, “I know. If Germany would deliver 
one million tons a month at the borders of France and Belgium” 
—and at that time she was willing to deliver more than that— 
“France and Belgium couldn’t take it away. They haven’t the 
canal boats, the railroads, the railroad cars and equipment to 
transport that much to save their lives.” But M. Poincare 
emphasized very strongly that we must not mention the question 
how much coal France and Belgium could take away. 

I say that that was a tip on what was going to happen, and 
what has brought us to our present pass. 

Mr. Fuller: I onlv want to say one word in regard to Mr. 
Noyes’ illustration. If I had a judgment of $10,000 against 
me, and I had only $1,000 in the world, I would do just the 
opposite of Mr. Noyes. I would pay the $1,000 in absolute 
good faith (applause), and I would trust in the good sense of 
the judgment debtor or the judgment creditor, I should say, that 
he would give me time to pay the balance. (Applause.) And 

20 


I believe if Germany had done what I would have done, and 
not what Mr. Noyes would have done, this question would have 
been settled long ago. (Applause.) 

. The Chairman : I hope, by the great applause that you 
give Mr. Fuller, that it indicates that you are all as honest as 
he is. (Laughter and applause.) 

Mr. DeWitt Clinton Jones: I would like to ask the in¬ 
terpretation of Great Britain’s stand as to Germany not being in 
voluntary default. Why did she vote “No” on the question of 
Germany being in voluntary default, in opposition to all the 
others, especially if the others were right? 

Mr. buLLER: It seems to me that the question would lead 
very far afield, and into a field which I should prefer not to 
discuss here. I don’t think it’s the question before the meeting, 
but I would answer you without going into details in this way: 
that I believe the political exigencies in Great Britain made it 
necessary for her delegate to be instructed to vote in that way. 
Again I am only giving you my own personal opinion on the 
subject which, I say, is hardly fruitful of discussion at this 
particular meeting. 

The Chairman: Has anybody any further remarks on this 
subject? 

Mrs. Beatrice Forbes-Robertson Hale: I would just 
like to say, as an outsider—I landed only nine days ago—that 
I believe that the English delegate voted against the German 
voluntary default first because the British did not consider in 
that particular manner of the deliveries of wood, that Germany 
was in voluntary default, but considered that she was in involun¬ 
tary default, and I believe that the American unofficial repre¬ 
sentative agreed in that view. Consequently, even if she had 
been in voluntary default instead of involuntary default, I think, 
and this is my own very humble and personal opinion, that the 
British delegate would have made a great mistake in voting 
that she was in voluntary default, because it would then mean 
that the moral power of the British Empire would be behind 
France in the next step which everybody knew she was going 
to take of invading the Ruhr. And as the British Empire is en¬ 
tirely solid in believing that even if this step may be technically 
justified on paper, it is unwise and fruitless of anything but evil— 
it seems to me that it would have been wrong to give France 
the feeling that she had the British delegate officially behind her 
in regard to that vote, which really meant the occupation of the 
Ruhr. (Applause.) 

The Chairman: Is there anyone else who wishes to express 
an opinion or judgment on that point—as to the reason for the 
divergence between the French and the British on the question 
of German voluntary default? 

Mrs. Madeline White: I would like to ask Mrs. Hale 

21 


if there wasn’t something more in the minds of the British than 
the moral factor—whether there wasn’t a more commercial 
reason for not standing by the French? 

Mrs. Hale : I think the moral factor is exceedingly strong, 
but the real factor, the one that is the deepest, is neither a moral 
one nor a commercial one. Nor is it a question of devastated 
regions, houses knocked down, and fruit trees torn up. It is 
a question of food for the English working man, woman and 
child. It is a question of life and death in England. In Eng¬ 
land we have a devastated region, but it isn’t a geographical 
one. We have between a million and a half and two million 
people out of work in England, who are living on pittances 
doled out by the Government. No Government can stand, no 
country can endure, with a total population of a little over forty 
million—of which nearly two million wage earners are perma¬ 
nently out of work. The one issue in England in internal politics 
is that here is a country that cannot support her population, 
cannot provide food for them, without importing it, for more 
than six weeks, and can’t pay for it excepting by exporting com¬ 
modities made in her factories. The one question in England 
is food for her people. She must see Europe economically re¬ 
stored so that she can do business with Europe; not in order 
that she may have profiteers and nonveaux riches, but in order 
that her people may live within the confines of the British Isles, 
and not starve to death. 

Mrs. White: I’d like to ask Mrs. Hale, why England, in 
order to solve her unemployment problem, couldn’t have stood 
by her ally, France, and transported that unemployed labor into 
the Ruhr, and helped the French extract the coal from the Ger¬ 
man mines? 

Mrs. Hale: How could England have taken builders, and 
carpenters, and so on, who don’t know how to mine, into Ger¬ 
many to mine the Ruhr coal fields, and thus throw her own hun¬ 
dreds of thousands of miners in England out of work? 

Voice: Let’s have Mr. Lippmann answer his own question 
as to the wisdom of the occupation of the Ruhr by the French. 

Mr. Walter Lippmann: The question was asked in a spirit 
of inquiry, because it seems to me that no amount of argument 
as to the legality of the move, and no amount of argument as 
to the provocation of the French, throws any light on the wisdom 
or the consequences of that move. Now, I can only say very 
briefly that in my judgment the occupation of the Ruhr is a self- 
defeating measure. (Applause.) That the consequences of that 
move to France will in the end be just as serious as they are to 
Germany. (Applause.) 

The Chairman: I see that Mr. Chadbourne, with whom 
I debate this question every time I meet him, has just come in. 
I told him that if he came, I would let him put his case, and I 
wouldn’t attempt to answer him. Mr. Chadbourne. 

22 



Mr. William M. Chadbourne: Mr. Chairman, I am an 
optimist. I believe that before the end of this year, we shall 
have a settlement of the reparations question, and I further be¬ 
lieve that the b rench occupation of the Ruhr will materially 
advance the date of that settlement. Before I give the reasons 
for my faith, I shall very briefly, having in mind the benevolent 
despot who presides over us, state certain fundamental principles 
which, it seems to me, determine the issue. 

First, I think we can assume that the three principal actors 
in this drama,—France, Great Britain and Germany,—are each 
acting in their own interest. I am not going to criticize them 
for that. We should do the same thing in their place, and I 
believe that if the American people will show a spirit of good 
will towards all of them,—a spirit we are better able than any 
other people to show—we can aid in the settlement and help 
them substantially afterwards. 

Secondly, we should bear in mind a fundamental principle I 
once heard Colonel House enunciate better than anyone else. 
He said he had discovered that when we deal with men and 
women, whether in a tiny village on the outskirts of Austin, 
Texas, where he first took an interest in public affairs, or whether 
in Downing Street, the Quai d’Orsay, or Wilhelmstrasse, we 
find they have very much the same motives, very much the same 
re-actions and respond to very much the same influences. And 
the chief of these influences is what I might term intelligent 
self-interest. 

As a lawyer, I have witnessed the settlement of a good many 
private disputes, which for bitterness, I think, can quite equal 
the international dispute which is about—as I view it—to be 
settled, after five years. As a possible basis for settlement, I 
am creditably informed that the French will accept something 
like this. 

They would accept a guaranty of their security in the shape 
of a permanent alliance with Great Britain. They have aban¬ 
doned hope of getting one with us, such as President Wilson 
negotiated at Paris. Secondly, they would want the cancellation 
of what they owe the British Government. I don’t think they 
worry very much about what they owe us. AndAn addition a 
substantial sum pretty quickly. That substantial sum, they believe, 
and I think rightly, should be secured by British aid through 
reaching the very large sums which German nationals have 
abroad in the shape of foreign credits and foreign securities. 
You can all guess as to their amount. I have heard it variously 
estimated from three to six billions of dollars. The German 
nationals would receive in return gold mark bonds. And then, 
in addition, the French would receive German gold mark bonds 
to a total amount not in excess of what everyone concedes Ger¬ 
many can pay, guaranteed by the British, so that the French 

23 


would know that they would have British aid in collecting them 
when, as is but natural and human, the Germans later 
would try to get out of paying them. We all try to do it. I 
am not criticizing the Germans. 

From the French point of view, that settlement would, I 
believe, be acceptable. The French are in deadly fear of Ger¬ 
many when Germany gets strong enough, and they are very 
badly in need of this money. They have a deficit in their bud¬ 
get of about a billion dollars a year. So I believe that they 
are in a settling frame of mind; and must have a settlement 
pretty quickly. 

Furthermore, I am told that the British are almost ready 
to accept the settlement. Mrs. Hale has told you about the 
desperate condition of Britain. And such settlement seems to 
be a more or less reasonable one, why shouldn’t the British settle 
on that basis? I have heard a rumor—we all of us hear rumors 
every now and then—that Bonar Law is not really dissatisfied 
with the French occupation of the Ruhr, because it enables him 
to deal with two classes in England, who are blocking the settle¬ 
ment I have suggested. The first class consists of a very power¬ 
ful group of British capitalists, who have invested large sums 
of money in Germany, and whose interest primarily lies in getting 
Germany off as easily as possible. And secondly, there is a group 
of very hard-headed British manufacturers, who realize that 
once Germany gets on her feet, she will be a serious competitor 
of Great Britain. 

Now, such a settlement, presaging as it would resumption of 
world trade, would, it seems to me, be a very reasonable thing 
from the British point of view. They are desperate, too. They 
can’t stand it much longer, as Mrs. Hale has told you. 

Let’s take the third actor in the drama, Germany. An extra¬ 
ordinary thing has come over Germany as a result of the policy 
of the Government since the armistice. Through the deprecia¬ 
tion of the mark, which has been terrible in its consequences, 
the great industrialists, the factory-owners, the financiers, at 
the expense of the bourgeoisie and at the expense of the working 
men in Germany, have pretty much come to own Germany and 
all German enterprises. Naturally, they don’t want to pay any 
more of their future income from this property to France than 
they can help. Heretofore, things have been going very well 
in Germany for them. But I think the French occupation of 
the Ruhr, presaging as it does that the French mean business, 
is going to bring to these Germans,—the governing class, the 
Stinnes group, the Thyssen group, who own modern Germany, 
and to the bankers,—a realization that there are two possible 
courses for Germany to pursue. One course means French oc¬ 
cupation of Germany, with the resulting disorganization of in¬ 
dustry. They will get very little out of that. The other course 

24 


means the releasing of Germany from its present obligations, 
leaving only gold mark obligations within her power to pay. 
She has practically wiped out her own internal debt, just as the 
other day, the North German Lloyd Company paid off with 
$30,000 mark bonds which it had sold for the equivalent of 
millions of dollars in gold a few years ago. Then Germany 
will leap ahead, and in my judgment, the profits that will be 
made by the owners of German industry, immediately following 
such a settlement, will be beyond the dreams of avarice. They 
will have to give up part of this to France, of course, but they 
will have the rest for themselves. 

Accordingly, if the three parties to the controversy are guided 
by self-interest, it seems to me that this is the thing they will 
normally want to do. It is just as though they were in a stage 
of private litigation where there have been negotiations for a 
considerable period which have gotten nowhere. And one of 
the litigants serves notice of trial for ten o’clock on Monday 
morning. Any lawyer can tell you that the chances of securing 
a settlement on a reasonable and fair basis under those circum¬ 
stances are a thousand times better than they were before notice 
of trial was served. The French entry into the Ruhr is the 
service of notice of trial upon the British and Germans, and I, 
for one, believe it will get results, and that speedily. 

Chairman : Mr. Chadbourne has envisaged here a new 
scheme. I am not a financier, but I wonder how it strikes the 
financiers who are here? How are these German credits to be 
obtained? Could you get at them, and how would it work out? 

Mr. Paul M. Warburg: The whole question is one of 
credit. The amounts that Germany is reputed to have in for¬ 
eign countries are not nearly as great as they are cracked up 
to be. No doubt they are important sums. If you knew in New 
York today,—as everybody knew in Germany when the indem¬ 
nity was fixed at a figure which everybody now calls fantastic,— 
that the consequences of the reparations would be an inevitable 
collapse; if you knew for a certainty that the American dollar 
would depreciate to one hundredth of a cent, while Canadian 
dollars would be certain to remain at par, you would get your 
dollars out of New York, and establish a balance in Montreal 
pretty quickly. Well, that is exactly what happened in Germany. 

Now, the moment you can give Germany some evidence that 
the reparation plan proposed is at all practical, so that Germany 
may hope to be able to balance her budget and create conditions 
of stability, that money will return. You can’t force it to return, 
but it would then return of its own accord. Of course, these 
foreign balances are not as large as people think, because most 
of that money is not kept in cash at all, but in goods. How 
could a German cotton spinner or weaver carry on his business 
with the dollar rising over-night by fifty or a hundred per cent, 

25 


unless he secured his cotton first? And how could he contract 
for the purchase of his cotton, unless he secured his dollars 
first? And for his domestic business he would have to apply 
the same policy, because goods are rising all the time. Who¬ 
ever sells anything, even though he may have saved his skin 
on an individual transaction, when the next deal comes can 
only replace what he has sold at a loss. Thus, there may be a 
tremendous activity, and nevertheless, the country as a unit, and 
the vast majority of the people, are getting poorer all the time. 
Activity is not a proof of prosperity. With the continuing de¬ 
cline of the mark, no German may dare to buy foreign goods 
on credit; it would break him over-night. If these foreign goods, 
or the balances that can buy them were confiscated, Germany 
would have to stop buying raw materials over here, close her 
factories, and face starvation, unemployment and riots. 

The question is, therefore,—where is the point at which 
credit can be re-established in Germany? At which point can 
the German, who doesn’t care to have his money lying in a bank 
at two per cent in Holland, or Sweden, or other foreign coun-. 
tries, be made to feel that he can safely bring his money back 
into Germany, where he would rather have it, because there is 
a shortage of working capital, and banks charge him fifteen, or 
twenty-five per cent, or more? At what moment can he afford 
to take it back? The answer is: when the indemnity question is 
properly settled on a basis that the country can stand. 

We have heard many times today, that Germany was not 
honestly trying to fulfill her part of the Treaty. That same 
thing was said when Germany offered one hundred billion gold 
marks at Versailles. At that time, that was refused indignantly. 
It is true that offer was predicated upon certain conditions, like 
the retention of Upper Silesia, ships, colonies, etc., but they 
were called dishonest tricksters because they offered one hundred 
billion gold marks. 

Today, even France agrees that fifty billion is about all that 
Germany could pay, and many students believe that even that 
is beyond her power now. Why does France object so much to 
having Secretary Hughes’ plan put into execution, which would 
have nothing else for its object but to determine what Germany 
really can pay? When President Harding took office Germany 
invited him to determine the amount, and offered to pay what¬ 
ever he would deem just. They have said all along: “Give 
us a sum that we can pay, and we will pay it.” Only a few weeks 
ago, what would correspond to the United States Chamber of 
Commerce, in Germany, asked our United States Chamber of 
Commerce to send over a commission of American business men 
to study the problem, and to make a report and tell the world 
what Germany can pay, admitting in advance that they should 
pay the maximum sum they could pay, and survive. Nobody 

26 


knows today what that sum is. I don’t. But you can’t re-estab¬ 
lish German credit and get back her foreign balances, until you 
base the reparation settlement on something else than an arbi¬ 
trary dictum. 

No answer was given to my question, which was not a rhetor¬ 
ical one, “Why does France object to an impartial investigation?” 
Would it be proper to insert the following after-thought as a 
reply ? France objects because, since America and England went 
back on their promise of a military alliance with her, she does 
not care for indemnity payments as much as for safety. This 
safety she sees in Germany’s industrial inability to prepare for, 
or carry on, a war. The Saar coal and Upper Silesian coal 
having been amputated, Germany will be incapacitated as a 
military nation if the Ruhr is under France’s control. The 
attainment of this aim, as Mr. Noyes has explained, has been 
France’s consistent policy, and with that end in view, she has 
used the elastic clauses of a treaty containing impossible terms 
imposed by force upon a disarmed enemy, in order to keep that 
enemy in a position of a “wilful defaulter.” 

When a country whose credit has been wittingly destroyed 
by its creditors, has paid two and one-half billion dollars (or 
more) in four years (that is two and one-half times what France 
paid in 1871 using her credit that had been left unimpaired) ; 
when a country laboring under a huge adverse trade balance and 
collapsing exchanges has to buy approximately as much coal 
from England as it delivers free of payment to France, so that 
the coal question in addition to being an industrial has become 
also an exchange question; when France has admited that Ger¬ 
many cannot pay, but that she will grant relief to Germany only 
if England and America will be equally generous creditors to¬ 
wards France; when—through no fault of Germany’s—France’s 
creditors refuse her perfectly plausible and justified demand in 
this respect, is it just and fair to punish Germany as a “wilful 
defaulter,” because England and America did not come through 
with a military alliance, and because they insist on France’s 
paying what she cannot pay? 

Mr. Fuller said that Germany, as a debtor, “should have paid 
the one thousand dollars and gone to jail, and then trust to the 
generosity of her creditors.” I am convinced that she has done 
just that. The German government went to the limit of what, 
without credit, she could pay, and as a consequence—barring the 
profiteers and a handful of wealthy industrialists—she is today a 
nation of undernourished paupers. She could have paid more 
only if her credit had been preserved, and she will pay more 
when her credit is restored. But instead of being generous, the 
creditors have placed upon her the stigma of appearing as a 
shirker and squealer; a stigma that furnishes the moral barrage, 
the smoke screen, to cover the advance into the Ruhr and the 

27 


violence it involves. It would be an interesting question to ask, 
how far the Ruhr invasion is prompted by the motive of exer¬ 
cising pressure, not on Germany alone, but also on England and 
the United States. 

But, while all of this makes us understand and sympathize 
with France’s necessities, fears, and national aims, while it ex¬ 
plains her motives, it does not justify her means. Germany’s 
motive in invading Belgium were easily understood—but her 
action brought down upon her the condemnation and enmity of 
the rest of the world. Even a beaten foe is entitled to justice, 
and the responsibility on the hands of the conquerors is all the 
graver where the enemy is disarmed and where the treaty makes 
the victor executioner and judge at the same time. 

Chairman : I am sure we should all like to have a little more 
light on Mr. Chadbourne’s scheme, in addition to that which 
Mr. Warburg has given us. I see Mr. Kahn over there, and I 
wonder if he would speak for a few minutes on the scheme which 
Mr. Chadbourne outlined—the capitalization of German credits 
outside of Germany? 

Mr. Otto H. Kahn: I came in only a few minutes ago, and 
as I heard only part of what the preceding speaker said, I am 
not sure that I understand quite correctly what the precise ques¬ 
tion is concerning which you have asked me to say a few words. 

Perhaps the best contribution I can make to the discussion, 
is to give you the gist of certain observations, as I understand 
and recall them, contained in a speech by Sir Robert Horne at a 
luncheon of the English-Speaking Union which I left ten minutes 
ago. 

Sir Robert, who, as you know, was Chancellor of the Exchequer 
until quite recently, said that the determination of the total 
amount of funds which German citizens have accumulated abroad 
cannot be anything but a more or less accurate guess. Of course, 
the “flight from the Mark” under the circumstances of the case 
was, to an extent, inevitable—just as it would be inevitable that 
I should endeavor to rush out of this room if I were unarmed 
and you came at me with a revolver. Some place the total of 
German balances abroad at a preposterously high figure, others 
greatly underestimate it. 

My own guess, arrived at by comparison of views with per¬ 
sons who ought to be fairly reliable guessers, is that the total 
is anywhere between one and two billion dollars, perhaps rather 
more than one, but certainly considerably less than two. 

Sir Robert said that the only way in which you can get capital 
to go into a country or stay in a country is to have that country 
fit for capital to live in. Capital is timid, fluid and a champion 
sprinter. Without discussing the point whether and to what 
extent the efflux of German capital could and should have been 
prevented by the German Government, Sir Robert expressed the 

28 


rW t i hat theie WaS n °.P° wer 011 ea rth that could compel that 
capital, or any part of it, to flow back into Germany, unless its 

znd Confidence . 81 "' 6 ^ COdd bHng * back " itb 


Well, that then is the question. Can a situation be brought 
about in the early future which will create the assured feelrng 
in the German mind that definite and bearable conditions, how¬ 
ever severe, will take the place of fantastic and unstable exac¬ 
tions, that it she will put forth her utmost efforts to work and 
to. pay just reparations, and will scrupulously observe good 
faith, then there is help for her and hope and an aim that may 
be attained? If so, incentive will return and capital will go back 
to Germany, for, if given safety and a fair chance, the oppor¬ 
tunities for the use of capital in Germany are great, and it will 
become not only worth while and for the self-interest of German 
citizens to withdraw the funds which have taken flight to for¬ 
eign countries, but there will be strong pressure by public opinion 
in Germany to have this done as a patriotic duty. 

A certain portion of the money thus flowing back into Germany 
could and would doubtless be used for subscription to a suitably 
framed loan, the greater part of the proceeds of which should 
be used for the payment of reparations. 

As I have said before, Mr. Chairman, I am not sure whether 
or not these remarks are germane to the question under discus¬ 
sion. 

Mr. Charles F. Weller: I want to ask a question that will 
throw the discussion back to where Mr. Noyes put it. If the 
purpose of France is not reparations in her move into the Ruhr, 
when her armies are at the best possible condition, isn’t her pur¬ 
pose, then, something other than reparations, but perhaps more 
sinister; the throwing back of the world upon the basis of mili¬ 
tary force? Isn’t the purpose of France war, and its conse¬ 
quences, rather than a peaceful settlement? 

Mr. Noyes: I have very little to add. That’s the opinion 
I have expressed, and I firmly believe that to be the case. (Ap¬ 
plause.) I believe it’s been that for two years. 

Mr. Weller : It wasn’t to express any prejudice that I asked 
the question; only to insist that we get back to the basis of our 
discussion, and if what Mr. Noyes says is so, we are losing time 
by going off on Mr. Chadbourne’s suggestion, because his scheme 
doesn’t fit into the facts. 

Mr. Fuller: I’d like to say that the question is one of 
collective or mob psychology, and it is impossible to answer a 
question of that sort, excepting to give one’s own personal opin¬ 
ion. Mr. Noyes lived in the Rhineland. He got the German 
point of view. He thinks that France is militaristic. I have been 
fortunate enough to live in France, and my own opinion is that 
there never was a less militaristic people in the world than the 


29 


people of France today. (Applause.) That is true of all classes, 
from Marshal Foch down. And the picture that Mr. Noyes 
puts before you—I hadn’t intended to refer to this—but the 
picture he painted of the scholarly, quiet, dignified, almost ridic¬ 
ulously dignified little Poincare, with the beat of the war drums 
and the clanking of the sword, was to anybody who knows France 
and M. Poincare almost ridiculous. (Applause.) 

Mr. Noyes: I have been waiting for more than two years 
for somebody to come forward and accuse me of being pro- 
German. It has never come before, but I get it now squarely. 
I lived in the Rhineland and I got the German point of view. 
That’s the accusation. Well, let me tell you that I early saw 
that such an accusation would be made, and I purposely asso¬ 
ciated with no Germans in the Rhineland while I was there that 
I possibly could avoid. I am not going to rub it in by commenting 
on what Mr. Fuller said, that he lived in France. In fact, I 
don’t want to go into this side of the question, because I think the 
situation is too serious for us to get down to accusing each other 
of being either pro-French or pro-German. We should be for 
ourselves and for the world. (Applause; continued applause.) 
I say that the future will prove itself. I haven’t got to worry 
about it. But it’s going to be no satisfaction to wait until the 
thing bursts, and then say, “I told you so.” That’s what hap¬ 
pened in the case of my prediction of a Ruhr invasion. 

The only objection I have to Mr. Chadbourne’s scheme is, 
it’s a good scheme, but will it work? Are you willing to throw 
a bomb into a crowd and take a chance that it won’t explode, 
that somebody will grab it before it blows the whole works up? 
I say it’s too dangerous a chance for civilization to take; and 
for the United States. 

Mr. Fuller: This is a personal privilege. In case anybody 
else misunderstood and misinterpreted my remarks about Mr. 
Noyes, I wish to say that that I have known and admired Mr. 
Noyes for a long time, and I never had the slightest idea that 
he could be pro-German. What I meant to say was, where a 
man lives in a certain atmosphere, no matter how hard he may 
try not to be influenced by the psychology in that atmosphere, 
it is very hard not to be so influenced. If I said anything to 
the contrary, I apologize, because I consider that the charge of 
being a pro-German is a very reprehensible one. 

Mr. Chadbourne: I don’t want to say any more on behalf 
of my scheme, but I do want to say something about the state¬ 
ment that the French policy was to plunge Europe into war. My 
answer to that suggestion is briefly this, that such a happening 
would bring good to no one. It would help no country in the 
world, least of all France. It so happened that I was in France 
in March, April and May, 1918, and it was my good fortune to 
know a great many French officers with whom I was serving, 

30 


high in rank and low in rank. And I agree with the British 
conception that there is no other people in the world who could 
have displayed under such circumstances such a cold, dispas¬ 
sionate, unemotional, far-sighted judgment, as the French did. 
An officer high in the British ranks, a general, said to me, 
‘Neither the British nor you Americans are anything like that. 
You and we shut our eyes, and put down our head, and rush in. 
The Frenchman calculates and draws back. He won.” 

I don’t believe that a people who showed that quality, and 
who are the most saving people in the world, perhaps the hardest 
working people in the world, are going to display such a mad- 
dog attitude, if you will, as might be implied by the thought 
that they are going to go to war again. I can’t help but feel 
that it is part of a carefully thought-out plan, and that it means 
that they are serving notice for trial, as I said, and are pressing 
for settlement. 

Mr. William Howard Gardiner: Mr. Chairman, in this 
very interesting discussion, it seems to me that one very, very 
important question has been overlooked. Mr. Noyes expressed 
some criticism of the American policy or, as he indicated, lack 
of policy. Mr. Fuller implied the same thing, and general public 
approbation was expressed on those two criticsims of the two 
speakers. It seems to me that the most important question in 
this whole discussion is the question of our American policy. 
That is as far as we are concerned in it. Personally, I happen 
to be in substantial, and I might say enthusiastic accord, with 
the policy of the United States in foreign affairs during the past 
four years. (Applause.) I should very much like to hear some 
speaker defend that policy, with specific reference to the present 
situation. 

The Chairman: I’ll give you the rest of the time, Mr. 
Gardiner. 

Mr. Gardiner: It seems to me that our whole trouble in 
this present, specific situation, and during the past four years, 
has been that we have looked upon ourselves as living in a com¬ 
partment of time instead of on the river of time. We have 
overlooked the fact that the present situation in Europe, the 
past eight years in Europe, are simply an incident for which 
there is a precedent. 

What happened? In the Napoleonic era, there was a peace 
settlement at Vienna. In that, the endeavor was made to set 
up a concordat of the powers. England refused to join that 
officially, but sent observers to the meetings for some seven years. 
Gradually she withdrew from commitment to any specific plan, 
and for over thirty years maintained the peace of Europe in 
spite of insurgencies on the continent, by being able to throw her 
weight on one side or on the other. And I think there is substan¬ 
tial reason to say that one of the greatest peace-preserving 

31 


factors of the Nineteenth Century was the gloriously isolated 
but extremely concerned relation of England to the affairs of 
western Europe. (Applause.) 

Now, what happened? In 1919 I was honored by a ques¬ 
tion from one of the Senators as to what the reaction of the 
United States would be toward the League of Nations. I told 
him that the thing was being can led along on the wave of p 
emotion, but that if action were delayed, then quite automati¬ 
cally, for reasons quite natural to the mass of the population, 
the United States would trend in the present circumstances to 
a policy analagous to that which England filled subsequent to 
1819. That’s why, in my opinion, the United States did not go 
into the League of Nations. 

What has happened since then? As far as the Germans are 
concerned, and excepting for the indebtedness owed us, we are 
out of specific relations of one kind or another to European 
politics. But we are intensely concerned in them. And, most 
important, we are free to deal one way or the other as circum¬ 
stances may suggest to be best. 

Furthermore, it seems as though England were now by force 
of circumstances being forced out, or she chooses to withdraw 
from specific commitments, one way or the other, on the Con¬ 
tinent. This policy, because it is not specifically yes or specifi¬ 
cally no from day to day, is accused, falsely, I believe, of being 
a policy of isolation, or no policy. As a matter of fact, I believe 
that it is the policy of judgment, holding itself, because of its 
extreme interest, prepared to go one way or the other as circum¬ 
stances arise. 

I want to add one word. It so happened that ever since the 
troubles broke out in Asia Minor, I have been asked pertinent 
questions. The officials of the United States, I believe, are 
taking the greatest interest in those specific questions, and they 
are doing something that the public is not doing. They look 
not only at the point where the flame may be this minute, but 
they are now looking all the time all around the world. And 
it is very interesting to hear that when the trouble broke out 
in Asia Minor back in September and early October, some of 
our best advised thinkers looked not only across the Atlantic 
with great concern, but with perhaps even greater concern across 
the Pacific. 

The Chairman : The Chair is going to show very great self- 
restraint, and not attempt himself to answer or to ask anybody 
else to answer Mr. Gardiner’s defense of the present adminis¬ 
tration’s policy. The meeting is adjourned. 


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